[JessicaLevin27]

My question involves collection proceedings in the State of California.

I defaulted on a credit card in 2003. In 2006 or 2007 an arbitration award was granted against me in connection with an MBNA credit card debt. I have to find the paperwork, but the original debt was $32K and I think the award added maybe $2K or $3K in interest and arbitrator fees, bringing it up to $35K or so.

The paperwork I do have in the file shows a settlement offer was made to me in March of 2006 on a then-outstanding balance of $38,708. I got a letter today showing a balance of $61K just two and a half years later, and offering me a 50% discount if I pay about $30K now.

I have checked the files of the superior court in the county where I live and no judgment has been entered against me so far.

I have several questions:

1) can the creditor attach my bank accounts, assets or wages without a court judgment?

2) How easy is it for them to get a court judgment, and will I be advised if they file for one?

3) what should I do, if anything, if they attempt to get a judgment against me here in Superior Court?

4) Once a judgment is entered, is that a matter of public record?

5) Once a judgment is entered, can they then attach my bank account without warning?

6) Is there an expiration date on an arbitration award?

7) Is there an expiration date on a judgment?

8) The original debt is due to roll off my credit rating in December of 2009. If an judgment is granted in superior court, will that go on my credit rating as a new debt and stay on for seven years?

9) This is not a legal question but how likely is a debt collector to accept a settlement offer from me of about $8,000?

10) If they accepted less than 100%, I understand I'd be sent a 1099 declaring any "forgiven" portion of the debt as income. I also understand that if I was not able to repay the full amount, this wouldn't count as income but I'll have to make my case with the IRS. Does anyone have experience with this?

11) Is there any legal limit on the interest rate that can be charged on a debt after an arbitration award is made? Going from $34K to $61K in two years seems excessive!

Thanks in advance for your expertise.

[Mr. Knowitall]

If the arbitration was done in accord with state laws that permit the judicial enforcement of an arbitration award, it's usually pretty simple to reduce the award to a judgment. The judgment can then be enforced judicially, with garnishments and execution against assets as permitted by law.

A new judgment arising from the arbitration award can be expected to appear as a new entry.

You can offer whatever settlement you want, and see what they say.

If you want to know the legality of what they've done, take all of the documentation including the arbitration award to a lawyer, and have your lawyer review it. They may be acting improperly, but we have no way to determine that.

[LawResearcherMissy]

1) can the creditor attach my bank accounts, assets or wages without a court judgment?

No. No judgment, no access.

2) How easy is it for them to get a court judgment, and will I be advised if they file for one?

Fairly easy, and the law requires that you be notified in advance of the hearing so you can show up to fight it.

3) what should I do, if anything, if they attempt to get a judgment against me here in Superior Court?

Show up for the court date.

4) Once a judgment is entered, is that a matter of public record?

Yes.

5) Once a judgment is entered, can they then attach my bank account without warning?

They have to file for a separate order, first.

7) Is there an expiration date on a judgment?

Judgments are renewable.

8) The original debt is due to roll off my credit rating in December of 2009. If an judgment is granted in superior court, will that go on my credit rating as a new debt and stay on for seven years?

Judgments stay on your report for ten years, unless they are renewed, which they can be every ten years.

9) This is not a legal question but how likely is a debt collector to accept a settlement offer from me of about $8,000?

We can't answer that. It depends on the debt collector.

11) Is there any legal limit on the interest rate that can be charged on a debt after an arbitration award is made? Going from $34K to $61K in two years seems excessive!

Yes. In California, that limit is 10%.